Factors Affecting Dairy Producers’ Participation in Dairy Processing and the Level of Participation in Bishoftu Town, East Shewa, Oromia, Ethiopia

Fikadu Mitiku

doi:10.7176/jrdm/61-02

Abstract

There are potentials for dairy production and processing in Ethiopia. However, producers are dominated by small scale dairy producers who sold fresh than processing to its products in Bishoftu town. Dairy producer’s participation in dairy processing was analyzed by objectives of factors affecting producers’ participation in dairy processing and level of processing. Data were collected through Censuses of 141 dairy producers and it was conducted by dividing them into three different scale farm producers. Accordingly producers who have 1-5 dairy cows were categorized as small scale producers, 6-10 medium scale producers and >11 dairy cows were taken as large scale dairy farms. Based on this classification there were 100, 34, and 7 small, medium and large scale dairy respectively in the town. Among these producers 25 small scale, all 34 medium scale and 6 large scale dairy producers were processors. It was assumed that all large scale were processors, but one producer was found to be non-processor and was omitted from census survey. So, the survey was conducted with 140 dairy producers in the town. Data were analyzed using econometric models, Heckman two stages. The result of the first stage probit model indicated that number of adults negatively affects producers’ participation in dairy processing; whereas total dairy output per cow and training affect positively and significantly. In Heckman second stage model, the number of adults in the household negatively affects the level of processing while total dairy output per cow, land holding, access to dairy processing equipment and dairy related training in dairy processing affect positively and significantly. Therefore, producers’ socioeconomic factors and institutional factors needed to be strengthened by supportive activities like training for capacity building of producers. Keywords: Dairy, processing, Censuses, Bishoftu, probit DOI : 10.7176/JRDM/61-02 Publication date: November 30 th 2019

Highlights

Background of study Ethiopia holds the largest livestock population in Africa, estimated at about 57.8 million of which female livestock constitute about 56.38 percent
Z' = is a vector of independent variables hypothesized to affect dairy producers decision to participate in farther dairy value addition ∂= is a vector of parameters to be estimated which measures the effects of explanatory variables on the farms decision £1 = is normally distributed disturbance term with mean (0) and standard deviation (σ) 1, and captures all unmeasured effects Y = is a dependent variable which takes a value 1 if the producers participate in dairy processing and 0 if they sell raw milk
The Binary Probit Results The model output reports result of estimation of variables that were expected to determine dairy processing participation of individual households

Summary

Introduction

Background of study Ethiopia holds the largest livestock population in Africa, estimated at about 57.8 million of which female livestock constitute about 56.38 percent. The total volume of milk produced in Ethiopia increased over the last 15 years from less than 1 billion liters to 3.06 billion liters (CSA, 2016/17). The dairy sector contribution to the national Gross Domestic Product is expected to increase in the years to come too. The overall country milk production expected to surpass existing milk demand (2016–2020) projection with about 2501 million liters that is above 47% (ILRI, 2015). As per the plan the surplus of milk could be substituted for imported milk products and used domestically for new or additional industrial uses. Milk production is an important part of the Ethiopian livestock production systems. Camels, goats and sheep are the main livestock species that supply milk in the country, with cow’s milk constituting 83.4% of the total annual milk output of the country

Methods

Results

Conclusion